Hitting the Connectivity Sweet Spot

Customers are beginning to expect connectivity on aircraft much the same way broadband became a staple years ago. Most airlines are fitting their fleets with these solutions, and consider connectivity a vital part of their overall strategy to win the hearts and minds of customers.

by Mark Holmes

In a recent presentation at the Aircraft Maintenance Summit in London, Euroconsult analyst Wei Li said that by the end of 2012 there were 940 commercial aircraft connected by satellites. According to the Paris-based company’s research, there are 2,600 commercial aircraft connected in total. Li said Euroconsult has forecast a 5 percent take rate by passengers, and that there are 56 airlines offering in-flight connectivity.

At least two of those providers will stop competing, as one of the biggest airlines in the world, American Airlines (AA), goes through a merger with US Airways. Brian Richardson, director, In-Flight Entertainment and Connectivity (IFE&C) at American Airlines, tells Avionics that customers “now want to be connected wherever they are.” But what does that mean for connectivity at American Airlines? Richardson likens the move to a connected aircraft as “table stakes.”

“If you want to be competitive, you have to have these services. Looking at my own experience, I recently flew to London and back and had Wi-Fi both ways, which was fantastic. I then flew to Tokyo, where the route did not have Wi-Fi, and all of a sudden, because I had experienced it on the flight to London, I now missed it when I didn’t have it. I was disappointed,” he says. “We will have Wi-Fi on that route later this year, but yes, I did miss it. This goes to show that, if you are a competitive airline, both domestically and internationally, you need to have connectivity.”

Connectivity means passengers can check bag status, connecting gate information and get all the info pertaining to their flight, says Richardson. “Everything related to your trip in terms of information should be made available via in-flight connectivity services,” he says. But that’s not all — connectivity must keep up to par with the traditional seat back systems famous for giving passengers access to content they’ve never seen before. And that can be hard when you’re talking bandwidth, though that doesn’t stop anyone from trying. “We have been working to have all different types of content from first run movies to documentaries to international movies,” says Richardson.

For AA’s international fleet, service on 13 777-300s is already fully installed. Meanwhile, AA is in the process of retrofitting its 777-200s with Ku-band, with plans following next for new 787s coming in the fourth quarter this year and the first quarter of 2015. Domestically, the airline has committed to take a combination of ATG4 and Ku-band on its Airbus aircraft and its new 737s, with a Thales in-seat system. At this point, Gogo has not been ready to provide a Ku-band service to these aircraft, “so we are equipping them with ATG4,” says Richardson.

Technical Challenges

Photo: American Airlines

Richardson says where all of the challenges really come in is trying to put these services on an aircraft. One of the major considerations is creating and installing an onboard infrastructure that can sustain a consistent level of service years into the future — and that can be quite a challenge. “It is important to remember that this is still a relatively immature industry. We continually work with our partners and suppliers to keep improving the product. We are not taking something off the shelf that is ready to go. This is a constant process that involves our IT team, this involves our engineering teams and our product teams working with the in-flight connectivity providers to continually make improvements to create a product that our customers value,” he says.

“There is an expectation from our customers that the service should be similar to what they have at home, despite the fact that they may be switching from satellite to satellite and flying over the North Pole. Our customers want what we call ‘life uninterrupted’ and do not expect to have a two-minute disconnect. There is an expectation that the in-flight experience should be very similar to the service I have in my living room.”

Another one of the challenges facing Richardson and his team is handling the integration process between AA and US Airways and keeping that strategy coherent. “We have a larger fleet to look at in terms of what we are going to do and how we are going to fit it all together. We still need more time to sort all of that out. The merger has not stopped anything that we have had planned.

“US Airways has fewer international routes and they had previously made the decision to remove overhead monitors. Their strategy is a bit different in the sense there is a difference between Boeing and Airbus aircraft. However, there are similarities in that we both have the Gogo product and they have in-seat systems on their A330’s and overhead systems on others. So, in that sense we are similar. But, they have gone with a different strategy domestically, so we have to find a way to make that all fit together,” says Richardson.

The question of whether to use a Ku-band or a Ka-band solution is another such divide, where the choice has repercussions for the future. Richardson says for AA it was a “relatively easy decision to make. Of course, we look at Ka-band and consider new technologies. But, I think there are a lot of opportunities with the spot beams on Ku-band, which will allow us to have the same kinds of speeds that we have with Ka-band,” he says. “The big suppliers are committed to providing a superior product. But, there are pros and cons for each technology. I don’t think there is a silver bullet.”

Saudia

The Middle East is a market where airlines are investing in these services on a gargantuan scale. Airlines such as Emirates, Qatar Airways and Gulf Air, which will be speaking at our Global Connected Aircraft Summit (GCAS) in early June, are aggressively bringing these services to passengers. Saudia is another airline in the region with a progressive strategy here. Tarik Sind, vice president of marketing and product management at Saudia, says the airline has been providing OnAir’s Global Systems Mobile (GSM) and Wi-Fi on its A330s for more than three years. With a successful launch, the service expanded to more than 20 aircraft.

“By combining the latest IFE system with the best global communications solutions Saudia has transformed the entertainment experience. Our passengers will enjoy in-flight entertainment contents on the widest entertainment screens and remain simultaneously connected, surf the web, text and email. Our vision will continue providing the best ever communication solution with ambitious plans to reach in 2016 with 40 connected aircraft,” says Sind.

Saudia started the launch in August of 2010 on eight Airbus aircraft; now it has reached 16. Sind says the return on investment is “very promising,” especially as its fleet is flying all over the globe. In terms of where it goes next, Sind says, “It’s a non-stop learning curve. Every day we see new technology has been implemented and new ways to promote the service. Lately Saudia has provided its fans on Facebook with free promotional Internet codes to be used on their flights; this trial impressed the passengers as it [was] presented for the first time ever among the carriers.

“Saudia is seeing a rapid change in the in-flight connectivity market and how it is becoming a mandatory service for passengers. Saudia is making a huge investment in the service by providing … [customers] with different options of payments and expanding the number of participat[ing] aircraft.”

Courtesy of Euroconsult

Norwegian

Norwegian, a low cost carrier, is another airline planting connectivity at the heart of its strategy. Boris Bubresko, head of business development, airport & in-flight IT solutions at Norwegian, says the airline is “a true believer” in connectivity. The airline started in 2011 and it has close to 70 aircraft with services installed. This equates to around 90 percent of its fleet.

According to Bubresko, Norwegian has close to 100 percent of the 737-800s equipped, of their fleet comprised of everything from 300s to 800s. The 10 300s will be phased out shortly, explaining why Norwegian will forgo Wi-Fi upgrades on those aircraft. Of Norwegian’s 74 737-800s, 70 have Wi-Fi installed. And with 150 undelivered Boeing aircraft on the way, the connectivity numbers are slated to go up. “So, there are a lot of installations taking place in Q4 and Q1,” says Bubresko.

Norwegian offers these services for free, which, as Bubresko says, means the system gets “stressed.” That high use means less bandwidth to go around, and that leaves the main issue: keeping up with demand. While the free service is popular, the consequences are congestions in the network. “To handle this we are blocking some sites and are throttling data. So, you can’t go on Netflix and other portals that offer high-bandwidth consumption. If you are doing email or social media, these users gain priority,” says Bubresko.

Aside from its connectivity offerings, Norwegian provides a portal on board for passengers to rent movies and watch TV series. This helps divert bandwidth overuse and, as Bubresko says, “More and more airlines will offer a connected service. You will see different solutions depending on the airlines’ need or location.

“We also believe that you will see more ancillary revenue models from the airlines. There is a captive audience on board. We will continue installing our fleet and develop models that will increase the passenger value and make our airline more efficient,” he says.

The company sees a strong return on investment on these services. “We believe we attract more people. We see that from the surveys we run. Passengers are highly appreciating these services. We see they are selecting routes that offer Wi-Fi services. So, that is the part of the return on investment.

“We also are currently in a process to connect our cockpit to the system. We expect to be able to connect our EFB [Electronic Flight Bag] and expect a more efficient flight planning and get updates during flight,” says Bubresko.

Like AA and many others, Norwegian is using Ku-band, but Bubresko admits this could change. “Going forward, any new technologies should be better. Our take on Ku or Ka is that it is still going to matter how you are able to manage the data usage. If you manage to do this in an efficient way it doesn’t matter whether it is Ku-band or Ka-band. We would consider moving to Ka-band in the near future if the economics are right.”